Economics · Ch 2 — Indicators of Growth and Development

Developed vs Developing Economies: Classification Criteria

Countries are broadly classified as developed or developing using several complementary criteria — none of them is sufficient by itself:

Criterion	Developed economies	Developing economies
Per capita income	High	Low to middle
HDI	Very High / High	Medium / Low
Sectoral share of output and employment	Dominated by industry and services; agriculture's share is small	Agriculture still employs a large share of the workforce, even where its share of GDP has already fallen
Literacy and education	Near-universal literacy, high enrolment at all levels	Improving, but often still incomplete literacy/enrolment
Life expectancy and health infrastructure	High life expectancy, well-developed healthcare	Lower life expectancy, healthcare infrastructure still expanding
Technology and capital	Capital-intensive, technologically advanced	Relatively labour-intensive, technology still diffusing
Urbanisation	Highly urbanised	Rapidly urbanising, but still substantially rural